Petronas, Malaysia's state energy conglomerate, announced a substantial 34% decrease in its net profit for 2024, amounting to 49.1 billion ringgit, or approximately $11 billion. This marks the second consecutive year of declining profits for the company, attributed to falling commodity prices. This significant downturn in profitability was revealed during a financial statement released on Tuesday in Penang, Malaysia.
The energy giant's total revenue experienced a 7% decline, dropping to 320 billion ringgit. The financial statement pinpointed lower average realized prices as the primary factor behind this revenue fall. Petronas, like many in the industry, has been grappling with the effects of decreased commodity prices, which have adversely impacted its overall profitability.
A closer analysis of Petronas' financial performance reveals that the persistent drop in commodity prices has been a major obstacle for the company over the past two years. Lower average realized prices were cited as the main reason behind the decrease in revenue and, consequently, the net profit figures. The 34% profit decline underscores the challenges faced by Petronas in navigating fluctuating market conditions.
The announcement made in Penang sheds light on the broader financial implications for Petronas and its strategic positioning amidst volatile market dynamics. The significant drop in net profit has prompted discussions regarding the company's future strategies to mitigate such economic pressures.